Telefonica and Claro Spice up Costa Rican Telecom Market
Published on: 11th Feb 2011
Note -- this news article is more than a year old.
State owned ICE faces important challenges and opportunities as a result of the recent liberalization and entry of new competitors into Costa Rica's mobile market, according to a new report from Pyramid Research.
By the end of 2010, the majority of markets in Latin America saw population penetration exceeding 100 percent. "Against that backdrop, Costa Rica offers America Movil (Claro) and Telefonica the opportunity to close a 30 point penetration gap, with advantageous economies of scale coming from several operations in the region," says Jose Magana, Senior Analyst at Pyramid.
"In addition, Costa Rica has a very small prepaid base (less than 30 percent of the total) and is in the early stages of the democratization of mobile data services, such as mobile Internet and mobile broadband," he adds.
"The price paid by Telefonica and Claro for mobile licenses is consistent with what we have seen in other auctions in Central America, and suggests that both operators will seek a significant share of the market over the coming years to challenge current incumbent ICE," explains Magana.
"The outcome of the auction will result in mobile penetration exceeding 130 percent by 2015, mostly driven by prepaid subscriptions and mobile broadband. By the same token, Pyramid anticipates a rapid migration in the mid- to high-end base toward mobile Internet subscriptions, thus increasing the share of mobile data services over total telecom revenue," he adds.